Ratio Working Papers
No 127:
Israel Kirzner on Coordination and Discovery
Daniel B. Klein ()
and Jason Briggeman ()
Abstract: Israel Kirzner has been one of the leaders in fashioning
an Austrian school of economics. In his rendering of the Austrian school,
one finds a marriage between Friedrich Hayek’s discourse with Ludwig von
Mises’s deductive, praxeological image of science — a marriage that seems
to us somewhat forced. The Misesian image of science stakes its claims to
scientific status on purported axioms and categorical, 100-percent
deductive truths, as well as the supposed avoidance of any looseness in
evaluative judgments. In keeping with the praxeological style of discourse,
Kirzner claims that his notion of coordination can be used as a clear-cut
criterion of economic goodness. Kirzner wishes to claim that gainful
entrepreneurial action in the market is always coordinative. We contend
that Kirzner’s efforts to be categorical and to avoid looseness are
unsuccessful. We argue that looseness inheres in the economic discussion of
the most important things, and associate that viewpoint with Adam Smith. We
suggest that Hayek is much closer to Smith than to Mises, and that
Kirzner’s invocations of Hayek’s discussions of coordination are spurious.
In denying looseness and trying to cope with the brittleness of categorical
claims, Kirzner becomes abstruse. His discourse erupts with problems.
Kirzner has erred in rejecting the understanding of coordination held by
Hayek, Ronald Coase, and their contemporaries in the field at large.
Kirzner’s refraining from the looser Smithian perspective stems from his
devotion to Misesianism. Beyond all the criticism, however, we affirm the
basic thrust of what Kirzner says about economic processes. Once we give up
the claim that voluntary profitable activity is always or necessarily
coordinative, and once we make peace with the aesthetic aspect of the idea
of concatenate coordination, the basic claims of Kirzner can be salvaged:
Voluntary profitable activity is usually coordinative, and government
intervention is usually discoordinative. But the Misesian image of science
must be dropped.
Keywords: coordination; concatenation; discovery; entrepreneurship; (follow links to similar papers)
JEL-Codes: A10; B00; D02; (follow links to similar papers)
63 pages, November 17, 2008
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- This paper is forthcoming as:
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Klein, Daniel B. and Jason Briggeman, 'Israel Kirzner on Coordination and Discovery', Journal of Private Enterprise.
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